India guar futures extend losses on crude oil fall

Fri Dec 19, 2008 6:41pm IST

 MUMBAI, Dec 19 (Reuters) - India guar seed futures extended
losses from the previous day on Friday on an expected drop in
guar-gum exports as a sharp drop in crude oil prices may cut
new oil exploration projects, analysts said.
 Guar gum is used as a controlling agent in oil wells to
facilitate easy drilling and prevent fluid loss.
 "Oil prices have tumbled and in this scenario nobody will
go for new exploration," an analyst at Religare Commodities
Ltd. said.
 Oil fell below $34 on Friday to its lowest level in almost
five years as the global economic slowdown overshadowed OPEC's
record supply cuts. See [ID:nSP402621]
 India accounts for 80 percent of world trade in guar gum.
 The gum, an extract of the guar bean, is also used in dairy
products such as yoghurt, soft cheeses and ice cream -- as well
as in bread, pasta, ham, sausages, prepared fish and pastries.
 The benchmark January contract on the National Commodity
and Derivatives Exchange (NCDEX) has fallen 36 percent since
hitting a high of 2,327 on July 22.
 Thin arrivals in the physical market capped losses, said an
analyst at Mumbai-based commodity brokerage.
 In Bikaner, a major spot market in Rajasthan, prices
dropped 24 rupees to 1,481 rupees.
 Following are the closing prices of guar seed and guar gum
futures in rupees per 100 kg on the NCDEX  <0#NGG:> <0#NGU:>:
  Contract     Reuters code    Closing price   Change in %
  =========================================================
   Guar seed
   Jan         NGUF9          1,487             -1.13
   March       NGUH9          1,540             -1.28
   Guar gum
   Jan         NGGF9          3,464             -1.02
 (Reporting by Rajendra Jadhav; Editing by Harish Nambiar)

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